The diplomatic tug of war for Ukraine intensified on Thursday as the EU's top foreign policy official said Kiev will still sign an association agreement with the bloc, while Russia made another attempt to woo its neighbour with its alternative alliance, a Kremlin-led customs union.

"Viktor Yanukovych made it clear to me that he intends to sign the association agreement," said EU foreign policy chief Catherine Ashton in Brussels, after returning from a two-day trip in which she met the president twice and spent time on Independence Square. Crowds have gathered there in protest against Yanukovych's decision not to sign the association agreement and instead turn towards Russia for financial help.

The prime minister, Mykola Azarov, said on Wednesday he had asked the EU for €20bn (£17bn) to help the Ukrainian economy recover from the short-term losses of the integration process, a figure many times higher than what is likely to be on offer.

Russian president Vladimir Putin, meanwhile, said in Moscow on Thursday that the customs union between Russia, Belarus and Kazakhstan "is based on equal rights and real economic interests" between participating states. "I'm sure achieving Eurasian integration will only increase interest [in it] from our other neighbours, including from our Ukrainian partners."

Early on Wednesday morning thousands of riot police moved in on Independence Square to remove barricades erected by protesters. Though there were fierce struggles, violence was only isolated and the Ukrainian government said its main goal was to remove roadblocks rather than attack protesters.

The US government has been surprisingly outspoken on the crackdown, even voicing the threat of sanctions against the Yanukovych regime.

"All policy options, including sanctions, are on the table, in our view, but obviously that still is being evaluated," State Department spokeswoman Jen Psaki told journalists, without giving any further details.

Assistant secretary of state Victoria Nuland, in Kiev for talks with Yanukovych earlier this week, handed out biscuits on the square the morning after the crackdown, and secretary of state John Kerry has spoken of US "disgust" over the government manoeuvres.

After securing the square early on Wednesday morning, the police then retreated from the streets, and aborted an attempt to regain control of city hall, occupied by protesters. The barricades were promptly rebuilt, twice as high, and up to 20,000 people spent Wednesday night at the square with not a policeman in sight.

There are rumours in Kiev that the government plans to convene a huge pro-Yanukovych rally on the weekend, bussing in supporters from the government's heartland in the east and south of the country.

Already, a small pro-Yanukovych rally exists near the Ukrainian parliament, where a few thousand supporters half-heartedly wave flags and listen to Russian pop songs each day. Some admit they are paid to be there.

Oleg Kalashnikov, one of the organisers, told the Guardian that decisions were still being taken on how big the weekend's counter-protest would be: "Many regional representatives who are coming to us are proposing to hold a big rally. But this is now only being negotiated. The decision will be made at a higher level."

The influential Zerkalo Nedeli weekly quoted a government source claiming that 200,000 people will be mobilised and sent to Kiev for the rally, prompting fears that the two groups of protesters could clash.